The companies had been working towards an all-stock deal, when some of Actavis' directors came out against it around the middle of this week. But executives on the two sides are still working to resurrect the deal, the journal said.

Valeant said in February it was in talks to make more acquisitions, and it remains open to discuss a potential "merger of equals."

Shares of Actavis, which has a market capitalization of $12.9 billion, have risen about 12 percent in the past three months.

Actavis, the third-largest global generic drugmaker, changed its name in January from Watson after buying Actavis as part of its strategy to expand in international markets and offer more specialty drugs.

Valeant and Actavis could not be immediately reached for comments outside of business hours.

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U.S. stocks ended down on Tuesday in a retreat from the previous session's sharp rally as energy shares declined and the dollar edged up, but the S&P 500 and Nasdaq registered their ninth straight quarterly rise.